FCC Deregulates AT&T in Boston

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AT&T Broadband's Boston cable system was deregulated by the Federal
Communications Commission Friday based on video competitor RCN Corp.'s
affiliation with local phone companies.

The FCC took four years to rule on the case, which had caused something of a
small political stir in Boston.

AT&T inherited the Boston system in a swap with Cablevision Systems Corp.
Cablevision filed the application for deregulation with the FCC July 14, 1997,
in a move that drew opposition from Mayor Thomas M. Menino, who complained of
Cablevision's dominance.

Under the Telecommunications Act of 1996, cable operators were deregulated on
all tiers if the competitor is a phone company providing video service,
regardless of the telco's video-subscriber penetration.

The FCC said AT&T-Cablevision demonstrated that RCN -- which offers
dozens of channels of video programming in Boston -- was affiliated with two
local-exchange carriers: C-TEC Corp. and MFS Communications Co. FCC sources said
RCN is providing local phone service in Boston.

In 1997, Menino claimed that it was premature to deregulate because
Cablevision had 130,000 subscribers while RCN had about 1,500 located in just
two of the city's 14 major neighborhoods.

Like all large cable operators, AT&T Broadband's expanded-basic-tier
rates were deregulated March 31, 1999, under the telecommunications law. The
FCC's action Friday bars Boston from regulating AT&T Broadband's basic
rates.

In addition, AT&T Broadband is no longer subject to the tier buy-through
prohibition or the uniform-rate rule.

In January, the FCC said MSOs deemed subject to effective competition -- like
AT&T Broadband in Boston -- are no longer required to carry local TV signals
on the basic tier.

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